In recent years, a broad set of national and international water issues has begun to receive significant attention at all levels of society, from leaders at the United Nations to local communities in the United States and around the world. The media and policymakers are increasingly focusing on water supply disputes, water quality problems, natural disasters, and privatization.
Corporations and institutional investors face their own specific challenges relating to water. In some cases, these problems will lead to decreases in water allotments, more stringent water quality regulations, growing community activism, and increased public scrutiny of water-related corporate activities. All of these factors may impact site selection, license to operate, productivity, costs, revenues, and ultimately, profits and corporate viability. Water-related risks now pose a potential multi-billion dollar threat to a wide variety of businesses and investors.
Almost without exception, corporations and investors are unfamiliar with freshwater-related risks and are unprepared to implement the suite of measures available to reduce them. Neglecting these risks, however, is not prudent. Indeed, evaluating risks related to water is vital for sectors where water plays an important role in production and operations, or in the supply chain. It is increasingly critical that investors, managers, and directors work toward a better understanding of the business sectors at greatest risk from water-related problems and of approaches for reducing their exposure. Ultimately, organizations that fail to think strategically about water will find themselves embroiled in highly public and emotionally charged disputes over a resource considered by many to be a basic human right.
This paper provides a snapshot of current global water issues, assesses the water-related risks most relevant for the business community, and describes the general kinds of activities companies could and should be taking to address them.